High Court Of Bombay
Jagdishprasad M. Joshi vs. DCIT & ORS.
Section 132
S.H. Kapadia & J.P. Devadhar, JJ.
Writ Petn. No. 1799 of 2002
9th October, 2002
Counsel Appeared
F.V. Irani with Murlidharan, Sachin Mahale & P.N. Patil, i/b V.M. Throat, for the Petitioner : R.V. Desai with P.S. Jetley & Mrs. S.V. Bharucha, i/b T.C. Kaushik, for the Respondent Nos. 1 to 5 : Salooja, i/b M.V. Kini & Co., for the Respondent No. 6 : B.B. Saraf with S. Vimadalal & Ms. Arora, i/b M/s Vimadalal & Co., for the Respondent No. 7.
JUDGMENT
By the court :
Rule.
The respondents waive service. By consent, rule made returnable forthwith and taken up for final hearing.
2. On 14th March, 2002, search and seizure operations were conducted by the Department under s. 132 of the IT Act, 1961, at the office premises, residential premises and factories of the petitioner. Prohibitory orders were also issued on the industrial undertaking of the petitioners at Silvassa and also on the office premises. Under the prohibitory orders, the bank accounts were attached, bonds were seized and FDs were also seized. However, during the period March to May, 2002, respondent No. 1 encashed the FDs and Rs. 72,40,330 from the bank account of the petitioner in the State Bank of India, Powai. Hereto annexed and marked as Annex. I is a statement giving particulars of encashment of FDs, withdrawal of cash, seizure of bonds and seizure of FDs. In this writ petition, we are not concerned with the question whether the petitioner has undisclosed income. What is challenged is the action of respondent No. 1 in encashing the above assets and appropriating the same without orders of assessment. We are, therefore, not required to go into the merits of the matter. Mr. Desai, learned senior counsel for the Department at the very outset conceded that respondent No. 1 had no authority to encash the FDs or to withdraw the cash from the bank accounts without the order of assessment. He fairly stated that on or before 23rd Oct., 2002, the Department would bring back the amount into the respective accounts from which they have been withdrawn. He, however, contended that the attachment of the accounts, the bonds and FDs be continued.
The action of respondent No. 1 vis-a-vis appropriation was high handed. It is not supported by any provisions of the IT Act, particularly when the appropriation is sought to be made without the assessment order. We would have taken a stricter view of the matter. However, on the facts and circumstances of the case, the following order is passed :
ORDER :
6. (a) On or before 23rd Oct., 2002, the Department is directed to bring back Rs. 17,93,58,944 into the respective accounts in the Syndicate Bank, Bhandup, Thane and Powai. Similarly, the Department shall bring back Rs. 72,40,330 into the petitioner’s account in the State Bank of India, Powai. The petitioners would be entitled to invest Rs. 17,93,58,944 in FDs as per the position prevailing prior to encashment of FDs between 19th March, 2002 and 23rd March, 2002 on such terms and conditions as the respective banks may deem fit. However, it is made clear that the petitioners’ FD accounts in the above banks will continue to remain attached and similarly, the petitioners’ account from which Rs. 72,40,330 has been withdrawn on 26th March, 2002, will also continue to remain attached. The petitioners will give particulars of FDs to respondent No. 1 as and when they invest Rs. 17,93,58,944. It is also made clear that the petitioners will invest the said amount of Rs. 17,93,58,944 in three (3) FDs as per Annex. 1. This is because prior to 19th March, 2002, the aforestated amount of Rs. 17,93,58,944 was invested in three (3) FDs of Rs. 7,13,65,983, Rs. 5,36,73,700 and Rs. 5,43,19,261.
(b) The bonds for Rs. 35,01,50,000 would continue to remain attached and that the same will not be appropriated except in accordance with law. The attachment will continue under s. 132(3) of the Act.
(c) Similarly, the two FDs, which the Department has seized, of Rs. 30,00,000 and Rs. 1,24,30,637 in April/May 2002, would continue to remain attached under s. 132(3) of the Act, till appropriation is done in accordance with the Act.
7. Subject to the above, the writ petition is disposed of.
[Citation : 273 ITR 296]
